Regional and Industry Cycles in Australasia: Implications for a Common Currency

Arthur Grimes ()

Macroeconomics from EconWPA

Abstract: If two countries experience similar cycles, loss in monetary sovereignty following currency union may not be severe. Analysis of cyclical similarity is frequently carried out at the overall industry level, then interpreted with reference to regional industrial structures. By contrast, this paper explicitly incorporates regional industry structure into an examination of Australasian cycles. Since 1991, NZ and Australasian cycles have been highly correlated, but there is little evidence that the NZ cycle has been 'caused' by Australian regional or industry cycles. We test whether the NZDAUD exchange rate has insulated NZ from Australian shocks, but find it has not played a major buffering role in response to Australian industry shocks (including mining shocks). Instead, the strongest impacts on the NZDAUD stem from the NZ cycle. An important loss of monetary sovereignty under currency union may therefore arise in response to NZ-specific shocks.

JEL-codes: E32 E52 F36 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ifn and nep-mac
Date: 2005-09-12
Note: Type of Document - pdf; pages: 42
View list of references View citations in EconPapers

Downloads: (external link)
http://129.3.20.41/eps/mac/papers/0509/0509020.pdf (application/pdf)

Related works:
Working Paper: Regional and Industry Cycles in Australasia: Implications for a Common Currency (2005)
Journal Article: Regional and industry cycles in Australasia: Implications for a common currency (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpma:0509020

Access Statistics for this paper

More papers in Macroeconomics from EconWPA
Series data maintained by EconWPA ().